Fees and profitability not necessarily directly linked


Posted on May 11th, by geoff in Caring Times. Comments Off on Fees and profitability not necessarily directly linked

Healthcare sector specialists Cushman & Wakefield team has examined average weekly fee spreads across the United Kingdom and identified the broad range of fees that care homes charged their occupiers varied according to location.

Tom Robinson, partner at Cushman and Wakefield, said: “the spread in average weekly fees highlights the way in which regional wealth impacts on profile and why so many buyers focus on the south and midlands.

“But underneath the regional zones, every micro location must be considered in detail as wealth pockets exist in all regions of the UK. Location remains a key factor when choosing to invest in a care home, both macro and micro.”

EBITDARM (Earnings Before Interest Tax Depreciation Amortisation Rent and Management) of care homes by bed is also explored. Scotland, where relatively low fees are charged, realised substantial profits and outperformed much of the regional competition.

Nick West, senior analyst at Cushman & Wakefield, commented that: “This data illustrates that the relationship between fee levels and subsequent profit is influenced by an array of additional factors and that it is not a binary connection. “Investors should look beyond the simple relationship when assessing an opportunity accordingly.”





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